Hair-raising data on checks.

Like everyone else in our industry, I have known that check usage for business-to-business (B2B) payments has remained high, but a recent report published by PayStream Advisors goes a step further to help explain why. As a contributing analyst to the report, I was surprised to discover that survey respondents perceive checks as best in four of 10 attributes, compared to other payment methods. For example, 55% rated checks as the option offering the “most complete remittance information.” As the report notes, favorable views of checks influence payment strategy. 

The Prevalence of Checks

Last year, the AP Automation Study by the Institute of Financial Operations (IFO) revealed 52% of survey respondents use checks for at least half of their B2B payments and 32% use checks for at least 75%. The PayStream survey results are even higher:

The report observes, “Although heavy check users are more challenged by high payment processing costs than the other organizations, they are also less likely to change their payment management strategies; the majority of heavy check users have not taken actions to decrease checks and increase electronic payments in the last two years.” Among heavy check users, 40% have taken actions to decrease checks (they are obviously falling short) compared to 81% of the remaining organizations. Indeed, concerted efforts are necessary to reduce checks, including implementing (and enforcing!) specific payment policies, and educating internal staff and suppliers about the benefits of electronic payments. 

Obtain the PayStream Report

The PayStream Advisors’ report, Electronic Payments and Card Solutions in 2015: Perceptions, Realities and Strategies, features:

  • trends in B2B payment method usage 
  • the status of Commercial Cards
  • influential factors for payment strategies
  • a look into payment solution providers

The report is available from PayStream Advisors.

Where Does Your Organization Stand?

Is your organization among the heavy check users? My January 5, 2015, blog post on reappraising the value of card payments included three key questions for organizations to address about their B2B payment strategies.

  1. What will drive your organization to reduce its check volume by adopting more card payments? 
  2. What percentage of B2B payments do checks comprise? 
  3. What is your card payments opportunity?

As you seek increased buy-in for expanded card usage, it can help to first understand what is behind any resistance. Many factors influence people’s perceptions about Commercial Card programs: previous experiences, lack of knowledge, media reports, and resistance to/fear of change. To combat misperceptions, the best approach is to avoid emotional arguments and stick to the facts. 

Face your payment strategy pitfalls head on and embark on some clean up. 

Face your payment strategy pitfalls head on and embark on some clean up. 

Available Education

For those interested in a broad introduction of Purchasing Cards and electronic payables, both of which are key ways to diversify a payments strategy, consider the on-demand course I created for Proformative Academy, an online professional development platform for CFOs and similar. 

About the Author

Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more

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